Back
19 May 2015
UK CPI unlikely to surprise to the upside - RBS
FXStreet (Barcelona) - Previewing the UK inflation data release today, Brian Daingerfield, FX Trading Strategist at RBS, notes that the CPI data wont see any meaningful upside surprises until later this year.
Key Quotes
“UK CPI is due and our economists do not see a meaningful pickup in core inflation as likely, at least until late this year. In fact, they forecast core inflation to hold stubbornly at just 1.0% y/y in April, matching the lowest level for core inflation since 2006.”
“The BoE’s Quarterly Inflation Report included a somewhat hawkish lean, and that could keep GBP supported as USD long-positions are cleared. Still, implicit in the BoE’s forecasts is an expectation of very weak productivity growth - low productivity growth accompanies other clear medium-term concerns for GBP, including budget and current account deficits.”
Key Quotes
“UK CPI is due and our economists do not see a meaningful pickup in core inflation as likely, at least until late this year. In fact, they forecast core inflation to hold stubbornly at just 1.0% y/y in April, matching the lowest level for core inflation since 2006.”
“The BoE’s Quarterly Inflation Report included a somewhat hawkish lean, and that could keep GBP supported as USD long-positions are cleared. Still, implicit in the BoE’s forecasts is an expectation of very weak productivity growth - low productivity growth accompanies other clear medium-term concerns for GBP, including budget and current account deficits.”